Australia’s opposition Labor Party has claimed its emissions reduction policy is impossible to cost, as businesses will take the reins on how to reduce their own pollution, after the conservative Liberal-National government put the bill at up to $26 billion.
As the campaign for the May 18 federal election continued Labor’s climate change spokesman Mark Butler has hit back at the current government’s latest modelling, saying the figures are “utterly ridiculous”.
“It is inherently impossible to model in a precise way, because what we’re doing is leaving this up to business,” he told ABC News today.
“That’s what business has asked us to do.”
AAP Newsagency reports Mr Butler said businesses asked for the lowest cost range of offsets, adding they could also change how they operated to reduce pollution.
Liberal-National government Treasurer Josh Frydenberg had pointed to analysis by his policy team putting the cost for business between $13 billion and $26 billion over 10 years under Labor’s measures.
Mr Butler said the modelling was based on “ridiculous” assumptions, including that not a single company would do anything domestically to reduce emissions.
Offsets would cost four times what the government’s own “climate solutions” modelling suggested.
AAP reports Labor is proposing an emissions reduction target of 45 per cent by 2030 on 2005 levels, compared to the coalition’s goal of a 26 per cent reduction.
Prime Minister Scott Morrison has demanded Labor leader Bill Shorten reveal the economic cost of higher targets.
The cost of Labor’s policy largely rests on the price of international carbon offsets, which the top 250 polluters could buy if they did not adequately reduce their pollution.
The Investor Group on Climate Change said companies were already considering carbon pricing in their strategies and investment decisions.
AGL, BlueScope, BHP Billiton, Chevron and Rio Tinto are among companies that apply carbon prices to decisions, with prices ranging from $12.50 a tonne at present to $140 a tonne by 2040.
Bloomberg New Energy Finance special projects analyst Kobad Bhavnagri said it was impossible to know the price of international offsets past 2020 as the United Nations had not developed the rules to govern the market.
Mr Bhavnagri said forecasts were always overestimated.
“That is because forecasters like me cannot anticipate human ingenuity and innovation,” he told AAP.
“But experience has clearly shown that once goals are set, innovators and businesses get to work and always find cheaper and better ways to do things.”
He said it could be cheapest to stay away from overseas credits and stick locally.
“Australia has some of the best renewable energy resources in the world, lots of low hanging fruit in energy-efficiency and a vast land sector for agriculture and forestry based credits,” he said.
The Australia Institute said failing to act on climate change would have a greater cost on the economy, with losses to agricultural production and impacts on human health.
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